In Ken Otterbourg’s May 15 article for CNN Money, Otterbourg considers how Charlotte has fared some 4 years after the financial meltdown. In many ways, the nation’s second largest banking hub is quite different. Perspectives and even physical appearances have changed, particularly for the city’s 2 largest banks. The wavy greens and blues of Wachovia, the regional powerhouse so long a staple in the city, were traded for the red and gold of Wells Fargo in their 2009 acquisition. Bank of America, on the other hand, still remains but has had its own struggles. As Otterbourg notes, though it may be too big to fail, BofA now faces a dramatically different landscape with heightened scrutiny and pressure.
This changing financial landscape, Otterbourg says, has forced the city to consider what was once an unthinkable reality—Charlotte outside of banks. “It’s a concept that was once unimaginable here. Like Detroit outside of cars. Or Vegas outside of gambling.” Bank of America and Wachovia put Charlotte on the map. And while Charlotte does have an international airport and small market NFL and NBA franchises, it is hard to overstate the banks’ importance in a place without a major river, harbor, or research university. No one can argue Charlotte would be the same without its ties to banking. Thus in 2008, the financial crisis shook Charlotteans to the core. Which begs the question—how has the city responded?
“From the city’s financial heart, the pain and uncertainty spread like a stain across the region,” says Otterbourg. “Unemployment soared. So did foreclosures. It was as if the whole land—the concrete and steel, the red dirt and the endless brick—was holding its breath, just waiting for the other shoe to drop.” And then, Otterbourg says, it didn’t. Construction, migration, and economic vitality slowly made its way back into the region. The financial sector started to show signs of life. The mass layoffs once feared at Bank of America and Wells Fargo never came to full fruition, and other banks such as Fifth Third, PNC, and Ally Financial stepped up to bridge the gap. Finance employment is back up to 50,000 and wages are on the rise. While these are still below the 2007 averages of 54,000 employed and $104,000 in wages, the outlook is getting brighter.
Perhaps more importantly, other signs of recovery are surfacing in non-financial sectors. Chiquita relocated its headquarters from Cincinnati and promised 400 jobs. NASCAR opened its $200 million Hall of Fame downtown in 2010. Manufacturers like Siemens, Westinghouse, and ABB all now have large Charlotte facilities. Yet manufacturing as a whole is still suffering, says Otterbourg, “accounting for two-thirds of the 60,000 jobs lost in the region during the recession.” So there is still work to be done.
Overall though, the business community seems to have rallied. New mayor Anthony Foxx and other city officials have committed to top priorities of: (1) attracting top businesses, and (2) keeping those already there within the city limits. Foxx and others make no secret that Charlotte is an importer of talent, and will pay to get it. In fact, Chiquita received $22 million in incentives and ABB will receive $2.5 million if they meet hiring goals. Says Foxx: “That’s Charlotte’s culture. It’s one of inviting businesses in.” And it is a mindset like this that is helping the city back on its feet while also establishing new roots.
The resilience of the city has not gone unnoticed. Its choice as host city for the 2012 Democratic National Convention is a step forward economically regardless of one’s political affiliation or backing. It has great potential to showcase the city on the national stage as a model for recovery and growth. This by extension could attract additional business and bring significantly more jobs to the region. No matter what—banking is and will always be at Charlotte’s heart.
But continued diversification in other sectors will be a key to continued growth and stability. In the words of Hugh McColl, perhaps Charlotte’s most influential financial leader: “We are not looking back on the banks. We can’t keep wringing our hands over that. The bank’s still very strong, and it will come through all of this, but I don’t think ever again will the city be dependent on the two rich uncles it used to have.”